#13 The Legal Profession This Week - Case Mismanagement Allegations, Facebook, and Heathrow's VAT Challenge​


By Dheepa​

The month of May saw significant leadership changes across London’s leading law firms. Aedamar Comiskey, a corporate veteran, was appointed as senior partner at Linklaters (The Lawyer). Gibson Dunn also appointed two new co-managing partners for its London office, litigators Ali Nikpay and Penny Madden QC (The Lawyer). Additionally, this week Mayer Brown appointed Jon Van Gorp, a finance partner who trained at the firm’s US offices as global chair. Litigation partner Sally Davies remains the firm’s London managing partner (The Lawyer). Other firms with elections due to take place this month include Baker McKenzie and Ashurst (Law.com).

Law firm leadership elections provide an insight into both the structural and cultural changes within the firm. Comiskey is Linklaters’ first female senior partner in its 180-year history, signifying the increasing importance the firm is placing on diverse representation at senior levels.

‘Business as usual’ – the notable deals and cases which went ahead this week:

This has been a bumper week for law firms in the courts. Monday marked the beginning of a highly anticipated dispute between Dechert and a former client. Two law firms have also failed to overturn initial rulings against their clients.

Allegations of Case Mismanagement against Dechert

The claim is being brought by Eurasian Natural Resources Corporation (ENRC) against Dechert, a former partner at Dechert – Neil Gerrard, and the Serious Fraud Office (SFO). The ENRC is alleging that the SFO’s 2011 probe into its company was mismanaged, claiming that Gerrard colluded with the SFO in secret meetings and leaked sensitive documents. (Law.com).

The ENRC’s case is that Gerrard used his relationship with the company to secure a $3.5 million lateral hire package at Dechert (Law.com). In its opening statement to the High Court, the company alleged that Gerrard had every incentive to keep the case ongoing through “scaremongering” and “reckless advice”, as it was the only mandate he brought with him when he moved over from DLA Piper (Law.com). Of the total $18.4 million that Gerrard and his team billed between 2011 and 2013, the ENRC mandate alone made up $18.1 million of that sum (Law.com).

ENRC is being advised by Hogan Lovells, the SFO by Eversheds Sutherland and Dechert and Gerrard by Clyde & Co (The Lawyer).

Facebook’s Competition Woes

Facebook’s £283 million acquisition of Giphy was first announced in May 2020. In its investigation into the deal, The Competition and Markets Authority (CMA) issued initial enforcement orders (IEO) against Facebook, forcing the companies to keep their businesses separate during the investigation (The Lawyer).

Last week, The Court of Appeal dismissed Facebook’s request for an exception to the IEO. The judgement found that Facebook had failed to cooperate with the CMA and provide the necessary information to consider the exception request (The Lawyer). The case reaffirmed the CMA’s power to employ methods that it deemed necessary to “prevent adverse effects from any substantial lessening of competition it has found” (The Lawyer). Latham & Watkins advised Facebook in these proceedings.

Heathrow Airport’s VAT Challenge

In September 2020, the UK government announced that the end of the Brexit transition period would also mark the end of VAT free shopping for all tourists entering the UK. Represented by Freshfields Bruckhaus Deringer, Heathrow Airport began judicial review proceedings to challenge the government’s decision (The Lawyer).

In its judgement, the court dismissed the airport’s claims, ruling that “This process and the resultant decisions were squarely within the Government’s margin of judgment and discretion” (City A.M.). It is important to bear in mind that judicial review proceedings only allow courts to decide on legal and procedural aspects of Government decisions. It does not give the court the power to question the actual merit of political decisions, such as the tax decision at the heart of this case.
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